Document ID: RFP 746 2600000131 Page: 1

Commonwealth of Kentucky

SOLICITATION

Modification: No Version #:

TITLE: Rate Setting C5987

Date Issued:

04/06/2026 Record Date:

03/30/2026

Solicitation Closes Date:

05/06/2026 Time:

14:00

Solicitation No:

RFP 746 2600000131

Online Bidding Prohibited: No

For Information Call:

Travis Mazurek 502-564-7736

Bid Receiving Location:

Bid Receiving

See Terms & Conditions for Bid Submission Instructions

Other KY

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Ownership Type

__ Sole Proprietorship __ Partnership __ Corporation __ Other_________________________

SIGNATURE OF AUTHORIZED AGENT IS REQUIRED UNLESS RESPONSE

IS SUBMITTED ELECTRONICALLY. FAILURE TO SIGN SHALL RENDER

THE BID INVALID.

Signature X_________________________________________ FEIN#____________________ Date____________

All offers subject to all terms and conditions contained in this solicitation.

Document ID: RFP 746 2600000131 Page: 2

Line Items

Commodity Group: Rate Setting

Line CL Description Quantity UOM Unit Cost Line Total or Contract Amnt

1 Rate Setting

Comm Code Comm Description Manufacturer Model # Manuf Part #

948 HEALTH RELATED SERVICES (FOR

HUMAN SERVICES SEE CLASS 952)

Extended Description Service to establishing Medicaid rates of reimbursement from the financial and statistical records submitted by various classes of providers. The rate for each Medicaid provider type is specifically developed for that particular provider type and is calculated by using multiple factors.

Shipping Information

Billing Information CHFS DMS Division of Fiscal Management dms.invoice@ky.gov 275 E Main Street 6W-C

Frankfort KY 40621

Document ID: RFP 746 2600000131 Page: 3

Submission Checklist

The following items will be required to be submitted with bid:

Item Technical Proposal Cost Proposal Oral Presentation, if necessary

Revised Febuary 2026

PROPOSAL SUBMISSION CHECKLIST

The Vendor MUST include the following with the proposal submission.

If the items highlighted below are not submitted with the proposal submission, the Commonwealth MUST deem the proposal non-responsive and SHALL NOT consider for award.

All other items MUST be submitted prior to award.

_____ SIGNED AND COMPLETED SOLICITATION –Section(s) 8.00 and 8.10 of this RFP (not required if submitting electronically)

_____ *PROPOSED SOLUTION (TECHNICAL) UNDER SEALED COVER AND BY CLOSING DATE --

Section(s) 8.00 and 8.10 of this RFP

_____ *PROPOSED SOLUTION (COST) UNDER SEALED COVER AND BY CLOSING DATE --

Section(s) 8.00 and 8.10 of this RFP

_____ TRANSMITTAL LETTER – Section 8.20 of this RFP

_____ PROOF OF REGISTRATION WITH SECRETARY OF STATE BY A FOREIGN ENTITY

(Section 8.00 of the Personal Service Contract Terms and Conditions of this RFP)

_____ REQUIRED AFFIDAVIT(S) – Section 8.20 of this RFP

*The Commonwealth defines SEALED as “a closure that must be broken to be opened and that thus reveals tampering” (Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/seal

Document Phase Document Description Page 4

2600000131 Final Rate Setting C5987 Total Pages: 49 https://www.merriam-webster.com/dictionary/seal

REQUEST FOR PROPOSAL

FOR

PERSONAL SERVICE CONTRACT

Cabinet for Health and Family Services (CHFS) Department for Medicaid Services, Division of Fiscal Management Rate Setting

RFP 746 2600000131

This document constitutes a Request for Proposals for a Personal Service Contract from qualified individuals and organizations to furnish those services as described herein for the Commonwealth of Kentucky, Cabinet for Health and Family Services on the behalf of the Department for Medicaid Services, Division of Fiscal Management.

Offerors are advised that any personal service contract resulting from this RFP must comply with all applicable provisions of KRS 45A and KRS 12.210 prior to becoming effective.

A contract, based on this RFP, may or may not be awarded. Any contract award from this RFP is invalid until properly approved and executed by the Finance and Administration Cabinet and filed with the Legislative Research Commission, Government Contract Review Committee.

1.00 Purpose and Background

The Cabinet for Health and Family Services (CHFS), Department for Medicaid Services, (DMS) is responsible for providing Medicaid benefits to eligible Members of the Kentucky Medicaid Program and reimbursing Medicaid providers for covered services. A part of the Department operations involves establishing Medicaid rates of reimbursement from the financial and statistical records submitted by various classes of providers. The rate for each Medicaid provider type is specifically developed for that particular provider type and is calculated by using multiple factors.

2.00 Scope of Work

For all providers, facilities, and/or practitioners receiving a “rate”, either per diem, per service, per hour, or per elapsed time period; or a “cost settlement” in lieu of a rate, the Vendor is expected to provide analytical services that result in a rate or cost settlement that is in compliance with Code of Federal Regulations (CFR), Kentucky Revised Statutes (KRS), State Plan Amendments (SPA), Kentucky Administrative Regulations (KAR) and material(s) incorporated by reference, billing manuals, transmittal letters, policies and procedures and an Ancillary Settlement Adjustment Report (if applicable), and the budget bill or expenditure targets as provided by the Department.

Perform the following responsibilities for all aforementioned facilities and additional facilities, clinics, and provider types as requested by the Department.

1. Conduct desk audits/reviews of cost reports submitted by Medicaid providers and/or revision of or creation of cost reports and cost report instructions required by Medicaid. Further, when requested, the Vendor is expected to perform approximately, but not limited to, 80 field audits (expected to be broken down as approximate 50 field audits for Hospitals and Nursing Facilities, and approximately 30 field audits for Primary Care and Rural Health) of Medicaid providers who are required to submit a cost report.

Department reserves the right to make a request for field audits of any cost-based provider type.

a. Review and approve alternate cost report forms;

b. Maintain Provider facility information database and provide listing to the Department;

c. Monitor Provider’s fiscal year end dates, prepare and mail cost report request letters, forms and instructions to providers and the Department within 10 calendar days following fiscal year end;

d. Mail “At Risk of Delinquency” letters to any providers who have not submitted their cost report two weeks prior to the cost report due date. The letter should indicate their deadline, the consequences of not meeting the deadline, and the information on how to apply for an extension;

e. Communicate with the Department regarding the status of delinquent cost reports;

f. Upon receipt of a delinquent cost report, notify the Department within three (3) days,

g. Receive, track, and review Provider cost reports monthly;

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h. Enter Provider cost report information into rate setting program and review for Provider errors or other areas of concern; make copies of cost report and work papers and forward to the other agencies upon Department request;

Where no cost report serves as the basis for the rate or rates, the Vendor is expected to access and utilize the market data, Medicare data, or Medicaid data identified by regulation as being relevant to the formation of the rate(s).

As the Medicaid rate year begins on July 1 of each year, the July 1 rates are expected to be delivered to the Department on or before June 1, unless otherwise indicated below. Where a cost report is required, only those cost reports having been received by the Vendor by May 1 shall be utilized.

2. Maintain the confidentiality of all work papers and other information relating to the rate setting activities and not disclose such information to any party without the explicit consent and under the direction of the Department. The Vendor is expected to comply with all Health Insurance Portability & Accountability Act (HIPAA) requirements regarding the use of, retention of, and storage of resident/recipient Protected Health Information (PHI).

3. Be responsible for and serve as the agent of the Department for purposes of supporting all appeal processes for services performed by the Vendor for provider types represented within this RFP according to 907 KAR 1:671. This is expected to include notifying the Department and the Provider of a claim within three (3) calendar days, scheduling all dispute resolution meetings, chairing meetings, and other administrative activities, notifying all parties of the date and time of the dispute resolution meeting, submitting certified mail return receipts at the dispute resolution meetings, court reporting services, offering expert testimony, and providing relevant documentation and position summaries, but does not include actual legal practice functions. The Department shall make the final appeal decision for dispute resolutions. For administrative hearings the Vendor is expected to be responsible for preparing exhibits, testifying, and providing fiscal impacts of potential and final decisions. The Vendor is expected to, also be responsible for any and all litigation support relating to services provided under this contract, if needed the Vendor is expected to be responsible for activities related to rate revisions, settlements, and related correspondence resulting from the appeal process. the Vendor is expected to retain records which relate to appeals, litigation, claims or exceptions that have been completed. In the event of a subpoena, demand for production of documents, or litigation, DMS agrees to the ownership of the data and work products and will be responsible for any production of documents as required, with assistance from the Vendor as needed.

4. Provide a status report and final report to the Department as requested, on all rate appeals and the status of all open rate cases, the type of letter sent to the provider (change/no change in rate), the date of the preliminary rate letter, the date the appeal is requested, the date of the dispute resolution, the date the dispute resolution decision is issued, the date of the administrative hearing, if applicable, the date of the hearing decision, and the completed review process date. Further, this data should be kept on site with the Vendor and available for the Department’s review at any time.

5. Use rate setting criteria and data to develop reimbursement forecasts and trends. Assist with budgetary calculations to ensure that Nursing Facility Medicaid payments do not exceed budgeted funds. the Vendor shall complete the annual upper limits test by Provider type pursuant to 42 CFR 447.272.

6. Produce and distribute work papers, rate letters (when required by regulation), and notices as required to the Department, providers and any entities designated by the Department. Comply with open record requests on behalf of the Department, complete surveys, provide status reports and ad hoc reports, complete facility updates, and prepare and mail provider letters, upon request by the Department. All letters relating to appeals and/or containing financial information shall be approved by the Department and sent to providers and requestors by certified mail. Maintain system for tracking requests for additional information.

Mail and provide copies to all appropriate individuals, including the Department providers and other entities as indicated by the Department, for all rate setting activities on a quarterly basis and requested by the Department – in either paper or electronic form, based upon the Department’s request.

7. Notify the Department, within 24 hours and in writing, of any irregularities or misrepresentations that might indicate criminal acts upon, or abuse of the Medicaid program discovered while conducting necessary activity on any rate case. Such complete and confidential findings is expected to be communicated to the Office of the Inspector General, CHFS in a letter that is separate and distinct from any work product produced as part of the associated rate case.

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8. Maintain a full-time monitoring system and secure through such system, a full and detailed knowledge of published, proposed and final federal and state statutes, rules, and regulations. Assist the Department in researching state and federal laws and regulations. Assist with the development and implementation of Medicaid rules and regulations, including, but not limited to, state plan amendments.

9. Maintain Medicaid manual updates, court cases and precedents pertinent to discharging the duties as the Vendor responsible for Medicaid rate setting.

10. Preserve and make available its records pertaining to this contract for the duration of the contract.

11. Administrative responsibilities, including but not limited to the following:

a. Produce various rate setting tracking reports to monitor the progress and completion of Provider rates;

b. Distribute copies of rate letters and profiles to the appropriate parties and update fiscal agent with Provider’s new rate information;

c. Communication of the Department policy with Providers on rate setting, cost reports and other policy issues; this and is probably not needed since this is the end of the administrative responsibilities section.

12. Research and be familiar with the Department’s rate setting criteria, statutes, rules and regulations, policies and procedures and any Medicaid contractor’s operations and functions that will enable the Vendor to provide effective Medicaid rate setting services for the Department. the Vendor is expected to work closely with and at the direction of the Department, with other agencies and contractors, including but not limited to, the Minimum Data Set (MDS) Medical Record Audit Contractor, CMS and CMS contractors, All State Technical Support Conference Calls, Division of Health Care Facilities and Services (MDS data), and fiscal agents.

13. Input all Medicaid rate setting data gathered to produce Provider rate profiles and establish and maintain an historical database of Medicaid rate setting data. Enter the cost report data from outstanding Medicaid cost reports into an electronic repository of information to check for mathematical accuracy, consistency and completeness. The Medicaid Rate Setting Information System (MRSIS) database is expected to be capable of reflecting statistical, revenue, cost, and other data contained on Provider cost report. Maintain Medicaid rate setting information repository, including the production of management reports and monitoring of the rate review system. The system must contain information for all Providers for which rates are calculated under the provisions herein. The repository is and shall remain the property of the Department throughout and subsequent to the contract period and shall be returned to the Department within 5 working days following the termination or expiration of contract.

Work with DMS to plan for MRSIS system updates as needed.

Produce management reports including but not limited to a Facility Listing, Status Reports, and Rate Notebooks and forward to the Department. Maintain database of Medicaid bed days for applicable facilities.

14. Provide continuous monitoring of the Medicaid rate review system and methodology. Provide cost report monitoring to include, but not be limited to, cost report requests, maintenance of Provider changes, tracking of report receipt, processing extensions, determining delinquents, and recommending escrow.

15. Modeling in the areas of: MDS 3.0 data using, Patient Driven Payment Model (PDPM) case mix weights and case mix indexes (CMIs) and other areas of cost and services for applicable facilities.

16. Analytic processes as a result of any grants the Department currently has or may receive. Work with the Department to confirm the scope of work for processes upon grant award.

Grant assistance will include, but is not limited to:

a. School Based Services Grant activities, inclusive of

1) Grant application coordination

2) Final program needs assessment

3) Infrastructure needs assessment

4) Stakeholder engagement

5) Focus groups, interviews, listening sessions

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6) Qualitative and quantitative data analysis

7) SHINE KY grant program

8) Policy reviews

9) Project management

10) Strategic planning and change management

11) Grant reporting and monitoring

b. Consolidated Appropriations Act Grant activities

1) Grant application coordination

2) Needs assessment

3) Project management

4) Implementation coordination

5) Oversight services to ensure grant compliance

6) Grant reporting and monitoring c.Assistance with any new funding opportunities that may arise

17. Develop and maintain standardized cost reporting format for organizations not covered by the CMS cost reporting rules using CMS standardized cost reports and instructions as a model, developing a generic or provider specific cost report for use by Medicaid Providers so that cost settlements, cost-based reimbursement, and/or cost coverage can be uniformly applied across Provider groups and services.

18. Conduct Non-State Government Owned (NSGO) Intergovernmental Transfer (IGT) calculations.

19. Provide training for, including but not limited to, staff, contracted others, and providers, make presentations and attend meetings relating to MDS, PDPM and rate-setting, and other reimbursement topics, at the request of the Department.

20. Conduct all rate-setting activities in conformance with appropriate State and Federal statutory guidelines and adhere to all policy determinations as set forth by the Department.

21 Maintain an office in Frankfort, Kentucky and provide at least four (4) staff, specifically a senior contract manager, a project staff Certified Public Accountant (CPA), and a staff person with facility reimbursement knowledge, and a staff person with MDS and Resource Utilization Group (RUG) knowledge, to be available Monday through Friday, 8:00 a.m. to 4:30 p.m., Eastern Standard Time.

22 Project deliverable deadlines may be extended by DMS in the event of unforeseen circumstances that warrant an extension. Any deadline extensions must be approved in writing by the DMS contract monitor identified on page 1 of the contract.

23. Assist the Department with any budget neutrality calculations that may be needed.

24. Perform an independent evaluation of the Multisystemic Therapy (MST) pilot program, including conducting semi-annual reviews, and deliver final evaluation report findings. Evaluation tasks may include, but are not limited to:

a. Research;

b. Interviews with DMS, sister agencies, and provider staff;

c. Refreshing data collection tools;

d. Requesting, receiving, and storing data;

e. Conducting stakeholder engagement activities;

f. Analyzing program performance; and

g. Preparing reports.

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2.01 - Long Term Care

Vendor Responsibilities:

1. Perform all functions relating to the rate setting process for Nursing Facilities (NF), both price based and cost based, Institutions for Mental Disease, Pediatric Nursing Facilities, Intermediate Care Facilities for Individuals with Intellectual Disabilities and/or Developmental Disabilities (ICF/IID/DD), Brain Injury Facilities, Ventilator Facilities, Hospice Providers, Veterans Affairs Nursing Facilities (VANF), and Swing Bed Facilities.

This process is expected to include, but not be limited to, the following services:

a. Maintain compliance with CMS for the utilization, movement and retention of all MDS data and process. This requires relationships with, including but not limited to, CMS, State Office of Inspector General (OIG), State Resident Assessment Instrument (RAI) Coordinator, and the Department;

b. Utilize a CMS MDS assessment database and determining which assessments to be used for case mix rate setting based on Medicaid policy;

c. Assign appropriate payer source for each resident on the MDS roster and/or database;

d. Import eligibility data and determining dual eligible Medicaid recipients and incorporating these into the case mix reimbursement system;

e. Maintain a Help Desk for provider phone calls with full reporting capacity and function;

f. Produce Medicaid MDS resident rosters;

g. Prepare MDS Delinquency Reports and mailing to appropriate providers;

h. Utilize Data Correction policies as defined in Medicaid provider letters A-158 dated March 14, 2001 and A-161 dated July 17, 2001;

i. Identify Duplicate Residents by reviewing the MDS transmissions and the RUG scoring to ensure that a resident is only counted once within the calculations used for rate-setting;

j. Maintain knowledge of CMS Sequencing specifications;

k. Maintain knowledge of Logical Coding of the MDS;

l. Communicate with NF software vendors in response to technical questions;

m. Develop and recalibrating case mix weight (as requested by the Department);

n. Provide recommendations for establishing and maintaining a risk based monitoring system for RUG or PDPM reimbursement;

o. Provide recommendations to the Department regarding MDS transmission trends for investigation. These trends should be documented and reviewed with the Department no less than quarterly. Further, the Vendor must investigate MDS transmissions on an as requested basis by the Department; and

p. Provide quality review with appropriate reporting and meeting communications.

2. Establish new quarterly and/or annual Medicaid rates and recalculate rates due to rate reconsiderations, appeals, audit findings, changes in reimbursement regulations; perform desk reviews of routine and ancillary services, calculate ancillary cost settlements, re-flow cost reports and notify providers of these changes for the following classes of providers: Nursing Facilities (NF), Institutions for Mental Disease (IMD), Pediatric Nursing Facilities (PNF), Intermediate Care Facilities for the Mentally and Intellectually or Developmentally Disabled (ICF/IID/DD), Veterans Affairs Nursing Facilities (VANF), NF Brain Injury Facilities, NF Ventilator Facilities, and Swing Bed Facilities.

a. Produce the following case mix reports and distribute to all nursing facilities and/or the MDS audit contractor, on a quarterly basis or as requested, if applicable. An explanation of the report is expected to be sent along with each report, detailing any necessary actions and/or upcoming deadlines applicable to the provider.

1) Previous quarter’s MDS First Preliminary Resident Roster Report, by the 21st of each month;

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2) Previous quarter’s Second Preliminary Resident Roster Report, by the 21st of each month;

3) Previous quarters MDS Final Resident Roster Report, by the 21st of each month;

4) Medicaid Delinquent Assessment Report;

5) MDS Audit Roster;

6) MDS Audit Forms;

7) Draft for review and disseminate a Kentucky Case Mix newsletter; and

8) Other Reports as requested by the Department.

b. As part of the quarterly rate setting process, obtain, review, and process MDS information to identify patient acuity levels. This MDS audit consulting process shall include, but not be limited to, verifying the MDS audit findings and ensuring that the audit sanctions are properly assigned. The Vendor is expected to, analyze audit data and verify MDS audit results prior to incorporating the findings into the price-based rates. Upon request of the Department, The Vendor is expected to conduct research and prepare reports to aid in the Department’s investigation of irregularities of MDS.

c. Produce and deliver, at a minimum, Medicaid rates for NF, IMD, PNF, ICF/IID/DD’-s, NF Brain Injury Facilities, NF Ventilator Facilities, VANF, and Swing Bed Facilities including both regular NF swing and Critical Access Hospital swing bed providers, in a manner consistent with the Department'-s policies and procedures and in conformance with appropriate and applicable State and Federal statutory and regulatory guidelines and adhere to all policy determinations as set forth by the Department, including rebasing rates as required by regulation. This service shall include, but not be limited to:

1) Calculate rates based on previous and current rate setting methodologies;

2) Maintain rate setting model for analysis of data;

3) Maintain rate setting notebooks and provide to the Department and others as appropriate;

4) Maintain Inflationary Indices;

5) Maintain Rate Setting Means Construction Index;

6) Determine Maximum allowable per bed value;

7) Update estimated Kentucky Medical Assistance Program (KMAP) days on quarterly basis for budget monitoring purposes;

8) Update bed occupancy for capital component on annual basis; and

9) Maintain rate setting indices, including Trending and Indexing Factors and Occupancy Limits

d. For the initial annual rate setting for all long term care providers except for swing bed providers, rates shall be effective July 1, of each year. These rates shall be mailed to providers with appropriate correspondence and back up documentation on or before January 21, April 21, July 21, and October 21 for the applicable rate quarters. Complete data and mail outs will include approvals by and copies to the Department.

For periodically occurring rate revisions due to such instances as changes in case mix, appeal decisions, etc., the rates are expected to be revised with appropriate correspondence and backup documentation prepared and mailed to providers within 10 days of receipt of the revision request. NOTE: Providers have until June 30 to submit adjustments. Therefore, adjustments to July 1 rates may be a requirement of the following contract.

3. If applicable dependent upon methodology changes, calculate Bed Reserve payment percentage for each NF on a quarterly basis. These calculations should be complete before the end of the first month at the beginning of each quarter. Computation of these payment rates includes receiving quarterly bed census reports from providers, copy quarterly bed reserve census forms for the Department, creation and maintenance of spreadsheet and/or databases, calculate and send payment rates to the Department, work with providers on corresponding problems relating to bed reserve payment, and send out quarterly provider notices. Complete data and mail outs will include approvals by and copies to the Department.

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4. Perform, directly or through a subcontractor, NF reappraisals pursuant to 907 KAR 1:065 Section 4(7).

5. In accordance with Providers reimbursed under 907 KAR 1:025, (i.e. ICF/IID/DD, dually-licensed pediatric facility, or a nursing facility with an all-inclusive rate unit) issue the prior audited or desk reviewed cost reports and a cover letter that includes the following:

a. Revised prospective rates;

b. Calculated cost report and ancillary settlements in compliance with the Department’s rate setting criterion, federal regulations, KAR, Manual of Operations, transmittal letters, policies and procedures and an Ancillary Settlement Adjustment Report; and

c. Provider’s appeals process pursuant to 907 KAR 1:671.

6. Assist with fiscal impact modeling of Patient Driven Payment Model (PDPM) changes on KY rate setting, rate analysis or rate restructuring, Upper Payment Limit (UPL) demonstration revisions, regulatory changes, and stakeholder meetings/trainings, all as needed.

7. Assist DMS with the establishment of a Program for All-Inclusive Care for the Elderly (PACE).

These functions are performed directly or through a subcontractor:

a.New or expanded PACE organization services, if applicable:

1) Establish a project work plan with key milestones

2) Gather data

3) State Plan review, fiscal impact estimate, CMS questions

4) Regulation’s review

5) Establish UPL methodology

6) Establish review procedures for rate setting

7) DMS and provider meetings

8) Establish PACE capitation rates with use of actuary for technical support

9) Assist with readiness reviews

b. Annually

1) Perform financial review of PACE organizations and review capitation rates to determine if revisions are necessary

2) Produce monitor reporting on financial viability

3) Develop PACE capitation rates (either annually or biennially)

4) Send rate notices to each PACE Organization

5) Assist with rate reconsiderations, as needed

6) Reconciliations as needed

8. Upon request, assist DMS with the implementation of a quality program for the nursing facilities.

This includes producing quality measure reporting, stakeholder meetings as needed, and quality add-on calculations.

9. Perform calculations for the NF provider tax, to include analysis of collections, estimated revenue, and estimated tax.

10. Perform MDS reviews for all price-based NF providers for the most recent quarter (or other agreed upon quarter) to assist DMS with re-instating MDS reviews post-COVID-19. This includes making necessary updates to the MDS review program that will be applicable for PDPM implementation. Services will include, but are not limited to:

a. Project planning, training, and meetings

b. Set-up for the MDS review Electronic Record System (ERS)

c. Provider communications and trainings as needed

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d. Remote reviews for an estimated 257 NF providers for 1 quarter (on-site reviews may be requested by DMS for certain circumstances or additional review)

e. Additional technical assistance and reporting as needed to perform the reviews

f. Updating the ERS to prepare for PDPM MDS reviews

g. Update the MDS Documentation Guidelines for PDPM and prepare communications and trainings for DMS staff and providers.

2.02 - Hospitals, Facilities, and all Psychiatric Residential Treatment Facilities (PRTF)

1. Perform all functions relating to the rate setting process for per diem reimbursed hospitals, freestanding psychiatric, rehabilitation, long term acute care hospitals, distinct part units and PRTF in accordance with KAR and KRS.

These functions include, but are not limited to:

a. Setting prospective rates from “as submitted” cost reports for hospitals, freestanding psychiatric, rehabilitation, long term acute care hospitals, distinct part units and PRTF.

b. Setting the final rates from audited or desk reviewed cost reports;

c. Preparing rate books for public rate hearings;

d. Attending rate hearings;

e. Answering any questions about rate calculations verbally or in writing after the hearing; and

f. Preparing mass adjustment requests and checking the adjustment before release of results to providers.

g. Setting bed reserve and therapeutic pass day payment percentages on a quarterly basis for PRTFs.

2. Perform desk reviews of all CMS-required cost reports (approximately one hundred eighteen (118) hospitals, Diagnosis-Related Group (DRG), per diem, and Critical Access) across the Commonwealth. The acute care hospital, facility and PRTF cost reports shall also be reviewed for outpatient settlement, Distinct Part Unit (Psychiatric and/or Rehabilitation) rate setting and psychiatric and rehabilitation hospital cost reports shall be reviewed for rate setting. Prepare interim and final certified public expenditure calculations for qualifying inpatient hospital providers. The financial and statistical information shall be reviewed for compliance with the Kentucky Medicaid Program (KMP) and all other applicable state and federal regulations. Desk reviews will be necessary to establish final rates. In addition, pharmacy consulting services will be provided to the Commonwealth on the 340B pharmacy program in order to establish hospital outpatient settlement calculations.

Upon request, pharmacy consulting services will also be provided to review various aspects of the Commonwealth’s pharmacy program benefit, to analyze the impact of reimbursement issues, and to evaluate the impact of proposed or enacted legislation and/or regulations. All tasks and priorities will be discussed and approved by DMS prior to any work being performed.

3. Calculate all Medicaid rates for hospitals, facilities and PRTF. Calculate the intensity operating allowance (IOA) supplemental payment analysis for applicable providers. Calculate and complete the Workman’s Comp Form, provided by the Department of Labor, for all Hospitals, Rehabilitation Centers, Long Term Acute Care (LTAC) Hospitals and Ridge Behavioral Mental Hospital. Forms completed from Nov. 1st through Oct. 31st of each year should be submitted to the Department no later than the 3rd day of Nov. each year.

4. Determine Upper Payment Limit (UPL) for facilities and PRTF and hospital subcomponents applying CMS rules and identifying and analyzing the upper payment limit ceiling (e.g. inpatient, outpatient), and also including the following: freestanding psychiatric, rehabilitation and Long Term Acute care hospitals;

Inpatient and Outpatient acute care and critical access hospitals (inclusive of subcomponents); PRTFs;

IMD, ICF/IID and VANF; ICF/IID OP clinics; CMHC; and Physician clinics paid fee schedule payments.

5. Determine Non-DRG per diem reimbursement rates for the following:

a. Freestanding psychiatric hospitals, freestanding rehabilitation hospitals, Long Term Acute Care facilities, Critical Access Hospitals, and any other freestanding non-DRG reimbursement facilities; and

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b. Psychiatric or rehabilitation Distinct Part Units within an acute care hospital.

6. Perform desk review and audit services to comply with the federally mandated audit of Kentucky’s Disproportionate Share Hospital (DSH) program. Project includes developing survey, gathering data from hospitals and applicable facilities, compiling data for each hospital’s facility-specific DSH limit, perform a desk review on survey data, determine if on-site audits are needed based on desk review results, conduct audits, and issue final report to the Department in order to be submitted to CMS.

7. Calculate annual Medicaid Inpatient Utilization Rule (MIUR) DSH adjustments based on CMS requirements.

8. Assist with the monitoring and application of the DSH payment methodology, including maintaining a payment tool, distributing, collecting, and performing reviews of completed payment surveys, analysis and fiscal impacts, provider communication and training (as requested), assistance with PCL revisions and PCL guidance for MCOs, and calculation of DSH payments in accordance with deadlines established in regulation.

9. Provide specific assistance regarding reimbursement systems for hospital inpatient services pursuant to the Omnibus Budget Reconciliation Act of 1990, Public Law 101-508, Section 4401. The contract includes work with any and all payment methodologies, including the inpatient hospital prospective payment methodology; Disproportionate Share Hospital (DSH) payment system; policy changes; revisions to state reimbursement rules and regulations; state plan amendments; obtain Centers for Medicare & Medicaid Services (CMS) approval; development of and training for Department staff for rate calculation and payment methodologies; and other training as requested.

The Vendor, in accordance with 907 KAR 10:830, shall:

a. Assist DMS with maintaining the inpatient hospital prospective payment methodology.

Identified analyses include, but are not limited to:

1) Adjustments to reflect most recent Medicare wage indices, geographic adjustment factors, Sole Community or Medicare Dependent Hospital rates, indirect medical education adjustments, outlier thresholds, outlier cost-to-charge ratios, and relative weights;

2) Other adjustments to base rates and relative weights as needed or at the request of the Department; and

3) Perform additional analysis related to inpatient rate setting as requested by DMS.

b. Provide review, support, and responses to open records requests related to MS-DRG issues;

c. Provide additional MS-DRG inpatient reimbursement analysis as requested;

d. Prepare reports describing the results of fiscal impact modeling and analysis as requested

e. Assist the Department with administrative tasks, including:

1) Define required policy changes, if necessary;

2) Draft revisions to state reimbursement rules and regulations, if necessary;

3) Preparation of state plan amendments and obtaining CMS approval, if necessary;

4) Development and performance of training for Department staff for rate calculation and payment methodologies and other training as requested; and

5) Participation in developing and conducting roll-out meetings and training sessions for providers.

f. Perform rate setting annually for non-Distinct Part Unit (DPU) providers that utilize psychiatric DRG claims;

g. Evaluate and provide assurances that reimbursement methodologies are in compliance with the State Plan and any applicable regulations;

h. Ensure no contact with providers or Managed Care Organizations on behalf of the Department without prior written approval from the Department;

i. Provide recalculations and analyses as requested throughout the year;

j. Provide research into various hospital payment methodologies as requested;

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k. Provide expert testimony on past calculations if needed for DRGs set by the Vendor;

l. Review and calculate any supplemental payments and graduate medical education payments provided to inpatient hospitals; and

m. Update MS-DRG system as needed.

10. Assist with the implementation and maintenance of directed payment programs for both private/NSGO and university providers as well as ambulance provider programs. This includes assistance with regulatory updates, state plan amendments, stakeholder meetings, data gathering and review, payment calculations (quarterly or annually as applicable in regulation), quality measurement development and monitoring, upper payment limit calculations, provider communications, appeals tracking, and fund balance tracking as requested.

a. Assist in potential implementation of directed payments programs for other provider types, which could involve:

1) Cost Report/Survey Tool Development

2) Cost survey collection from providers

3) Assist with the implementation and maintenance of a new provider tax and enhanced payment program for ambulance services. Tasks and task priorities will be discussed and approved by DMS

4) Program modeling

5) Provider communications

6) Department and provider trainings

7) SPA and pre-print writing

8) Payment reconciliations as applicable

9) Reviews/sampling of provider quality data

10) Provider tax waiver and IGT funding support

11) average commercial rate surveys/calculations

11. Assist with implementing rate updates for Ambulatory Surgical Centers (ASC) and renal dialysis rates.

This includes annual updates consistent with Medicare and/or Department program policies, provider communications, state plan and regulation review and or updates.

12. Assist the department with the calculation of base and enhanced medical education reimbursement and supplemental payments for inpatient and outpatient hospital providers as directed by the department. Assist with medical education program changes including revision to statutes, regulations, state plans, public notices, and other approval documents upon request.

2.03 -Federally Qualified Health Centers (FQHC), ICF/IID/DD Clinics, Community Mental Health Centers (CMHC), Rural Health Centers (RHC) and any other clinics as required by CMS

1. Calculate all Medicaid rates for Federally Qualified Health Centers (FQHC), Intermediate Care Facility for Individuals with Intellectual Disabilities and/or Developmental Disabilities (ICF/IID/DD) Clinics, Community Mental Health Centers (CMHC), Rural Health Centers (RHC), Specialized Children’s Services Clinics, and any other clinics in regard to interim initial rate, ongoing cost-based rate, price based rate, or change of scope rate.

2. Perform desk reviews of Medicaid Universal Cost Reports prepared by Federally Qualified Health Centers (FQHC), Intermediate Care Facility for Individuals with Intellectual Disabilities and/or Developmental Disabilities (ICF/IID/DD) Clinics, Community Mental Health Centers (CMHC), Rural Health Centers (RHC), Specialized Children’s Services Clinics, and any other clinics as required by CMS.

The financial and statistical information shall be reviewed for compliance with the Kentucky Medicaid Program and all other applicable state and federal regulations.

a. Notify the Department within 24 hours, in writing, of any irregularities or misrepresentations that might indicate criminal acts upon, or abuse of the Kentucky Medicaid Program (KMP) discovered while conducting necessary activity on any rate case. Such complete and confidential findings shall be communicated to the Office of the Inspector General, Cabinet for Health and

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Family Services, in a letter that is separate and distinct from any work product produced as part of the associated rate case.

b. Perform field audits as requested by the Department.

3. Perform reviews and calculations on wrap payments for PCCs, FQHCs, and RHCs.

a. Determine any revised interim payment amounts needed for changes in final Prospective Payment System (PPS) rates determined through the desk review or appeals process;

b. Upon obtaining complete MCO encounter data, perform a final reconciliation of all wrap payments;

c. Provide any and all appeal and litigation support, including class action, for final reconciliation calculations of any wrap payments.

4. Determine upper payment limits (UPL) for clinic, physician, and DME providers applying CMS rules and identifying and analyzing the upper payment limit ceiling.

5. Assist with interagency cost settlements for the HANDS, Title V, OCSHCN and Health Department Home Health programs. This includes cost report/form tracking and review and cost settlement calculations and assistance with program review or policy updates as requested. This may also include program review for targeted case management and therapeutic foster care. Additional scope of work can be agreed upon as needed for program review.

6. Assist with rate setting, cost report review, quality monitoring, and certification for Certified Community Behavioral Health Centers (CCBHC). Also, assist with activities to expand CCBHC services to additional providers. Activities include, but are not limited to:

a. Collection and annual desk reviews and training for CCBHC cost reports.

b. Annual rate setting and provider rate communications.

c. Monitoring of CCBHC encounter and MMIS data to calculate potential wrap payments.

d. Assistance with templates, collection, and monitoring of certification and quality data.

e. Issuance and monitoring of corrective action plans.

f. Assistance with CMS reporting and updates of the CCBHC monitoring plan.

g. Attendance as requested for Department and/or stakeholder meetings.

h. Additional technical assistance as needed.

i. Project management for expansion activities.

j. Assistance with completing a statewide behavioral health needs assessment.

k. Preparing a feasibility and sustainability study to inform DMS decisions related to expansion.

j. Assisting DMS to establish a statewide governance structure.

k. Provider training and education related to expansion activities.

7. Mobile crisis services may be requested, inclusive, but not limited to the following. Additional scope can be agreed upon in writing between parties.

a. State plan drafting or review

b. Rate-setting

c. Policy development

d. Facilitating workgroup sessions

e. Assisting with development and reporting of key program indicators, by providing data governance principles, oversight, and advisory services focused on improving provider data quality, collection, and reporting.

f. Project management activities to implement MCI services, including use of tools tailored for oversight and maintenance.

g. Technical and program assistance to support the mobile crisis service continuum:

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1) Oversight and facilitation of expanded governance structure;

2) Assistance with internal and public communications;

3) Maintain grantee program expansion;

4) Assistance with research, data modeling, and forecasting.

h. Implementation of MCI integrated technology services, training, and coordination

1) Assistance with provider onboarding;

2) Assistance with interoperability of MCI training platform;

3) Assistance with implementing funding strategies.

i. Assisting DMS with the administrative oversight of the Community Co-Response (CCR) grant program. This includes but is not limited to:

1) The pass through of funds to the CCR providers by establishing a bank account to collect funds from DMS and pass through to providers.

2) Assist DMS with collecting routine grant program reporting from providers and summarizing the reports.

3) Hosting regular meetings with grantees to offer training and DMS policy updates.

2.04 - KY Resident Assessment Instrument Training for Minimum Data Set (MDS) 3.0

1. Provide a Resident Assessment Coordinator Certified (RAC-CT) instructor for each training. A subcontractor may be permitted for this subsection.

2. Provide training annually to MDS Coordinators in Long Term Care facilities on behalf of the KY OIG and the Department on the following topics:

3. Minimum Data Set (MDS) 3.0 coding, assessment scheduling for Medicare Prospective Payment System (PPS) and Omnibus Budget Reconciliation Act (OBRA), Resource Utilization Groups (RUG IV),

4. PDPM, Care Area Assessment /Care Area Triggers (CAA/CAT), Care Planning and Assessment submission and correction.

5. Training must be conducted at least 3 days per Federal Fiscal Year (Oct-Sept) for approximately 400 participants annually. Two trainings will be conducted as follows:

6. 2-day basic MDS 3.0 training on MDS 3.0 coding, assessment scheduling for Medicare PPS and OBRA, CAA/CAT, Care Planning and Assessment Submission between July 1 and August 31 each state fiscal year.

7. 1-day advanced MDS 3.0 training on any CMS MDS 3.0 Updates to the manual between October 1 and June 30 each state fiscal year.

8. Provide all training material to the OIG in an electronic format. The training material must be reviewed and approved by the Office of Inspector General (OIG) prior to training.

9. Meet (telephonic or in person) with OIG to determine the agenda for each training session, no later than July 10 each year.

10. Provide customized training as needed throughout the contract period to select audiences such as Nursing Home Associations, Annual Conferences, Pro Nurses, and any other audiences required by the Department.

11. Provide training on RAI manual updates, MDS updates and any other updates as required by the Department throughout the contract period.

2.05 -Pass Thru Payments

The Vendor is expected to have the ability to process pass thru payments to providers if necessary for the Department to meet the needs of a program or grant.

2.06 Deliverables

1. Cooperate fully with any contractors, consultants, or other parties engaged by the Department or with other State agencies that are mandated with full or partial responsibility to ensure the effective delivery of service. Such cooperation will include permitting access to files, procedural documents, and any other

Document Phase Document Description Page 16 records in the possession, or under the control, of the Vendor when such disclosure is requested by the Department.

2. Accept the Department’s right to undertake or award other contracts for additional or related work and the Vendor is expected to fully cooperate with other contractors. The Vendor should not commit or permit any act that will interfere with the performance of work by any other contractor.

3. Acquire and maintain, at the Vendor expense, all automated systems equipment and systems software necessary to conduct Long Term Care and Hospital cost report and ancillary settlements and related activities. The Vendor will be required to calculate Medicaid rates using both current and prior (for hospitals) rate setting methods.

4. All documentation and printed materials developed by the Vendor for the Department under this contract may be reproduced by the Department.

5. Perform certain administrative functions associated with Medicaid rate setting to include, responding to provider inquiries on reimbursement issues, maintaining rate setting working papers, storing and securing all cost reports and rate setting documentation received under the contract, providing copies of rate setting papers in accordance with the Kentucky Open Records Act, and other minor functions.

6. Maintain liability insurance equal to one (1) time the total contract price in order to cover the services of the personnel provided under the terms and conditions of this agreement.

7. In the event the Vendor sets a rate, and a subsequent dispute of that rate takes place after any termination of this contract, the Vendor will still provide witnesses and documentation as necessary for any proceedings related to that dispute and any litigation related thereto.

2.07 - Staffing Requirements

Project Manager Qualification Requirements and Duties

The Vendor is expected to designate a Project Manager who is expected to serve as the Vendor ultimate authority in ensuring the Vendor successful delivery of services. The Project Manager is expected to have at a minimum, the following qualifications and experience:

1. Certified Public Accountant (CPA) properly enrolled to practice in the State of Kentucky with at least five (5) years of accounting and/or Medicaid appeal services experience with State Medicaid Agencies;

2. At least five (5) years of experience in preparation and presentation of material and testimony for Medicaid administrative or judicial hearings, in response to reimbursement litigation;

3. At least five (5) years of experience in developing rationale for and recommended…